Setting aside a financial agreement

What it means to set aside a financial agreement in Australia

A financial agreement is a legally binding contract between partners that outlines how assets, liabilities, and financial matters will be handled during a relationship or if it breaks down. Setting aside a financial agreement means asking a court to declare the agreement invalid or no longer binding, effectively cancelling it.

In Australia, financial agreements are governed by the Family Law Act. They allow couples to take control of property division rather than relying on court decisions. However, there are strict legal requirements these agreements must meet to be enforceable.

When circumstances change significantly, or if the agreement was not properly created, you may seek to challenge prenup arrangements or other financial agreements. People sometimes challenge a prenuptial agreement where they believe an invalid financial agreement exists because certain steps were missed during its creation.

An invalid financial agreement can arise if proper disclosure was not provided, if either party lacked independent legal advice, or if the agreement was signed under pressure. To set aside financial agreement arrangements, one of these grounds generally needs to be demonstrated to a court.

Key points

• Financial agreements generally need to meet strict legal requirements to be enforceable.

• Independent legal advice for both parties before signing is generally a requirement.

• Full financial disclosure is generally a requirement for the agreement to be valid.

• Courts can set aside agreements if requirements were not properly followed

• The grounds for challenging vary and depend on the particular circumstances.

• Some people seek professional guidance to clarify whether a situation may have grounds.

Common situations

You may be considering setting aside a financial agreement if:

• You and your ex-partner made an agreement years ago that no longer reflects your financial circumstances

• One party did not receive independent legal advice when the agreement was signed

• There was significant non-disclosure of assets or liabilities at the time

• Your financial situation has changed dramatically due to inheritance, business growth, or other major events

• You now believe the agreement was unfair or was signed under pressure

• One party misrepresented their financial position

• In some cases the agreement was never properly documented or witnessed.

• Some people wish to revisit property settlement terms without going through full court proceedings.

• In some situations a person discovers the agreement does not accurately reflect what was actually agreed verbally.

Where an agreement was not properly created or contains fundamental flaws, attempts to enforce it later can sometimes lead to disputes, delays, and uncertainty about rights. Courts may need to intervene to clarify what is actually binding. This can be time-consuming and costly if the matter becomes contested.

What to consider

• Was independent legal advice truly given to both parties before signing?

• Did you fully understand the agreement at the time you signed it?

• Has there been a significant change in circumstances since the agreement was made?

• Do you have copies of all original documents and correspondence?

• What type of binding financial agreement did you create (prenuptial, post-separation, or de facto)?

• Are there any concerns about lack of disclosure when the agreement was made?

• How much time has passed since the agreement was signed?

• What are the practical and financial implications of seeking to set it aside?

What you can do next and how LawConnect can help

If you believe your financial agreement should be set aside, you may wish to:

1. People often gather copies of the original agreement and all related documents from the time it was signed.

2. People often make a list of any concerns about how it was created or any changed circumstances.

3. People often note any potential breaches or failures to meet legal requirements.

4. People often document any significant changes to their financial position since signing.

5. People often reflect on the full range of grounds on which courts might set aside agreements.

6. People often reflect on what outcome they hope to achieve if the agreement is cancelled.

7. Some people explore whether discussion or negotiation with an ex-partner is possible first.

How LawConnect can help

Setting aside a financial agreement can feel complex, especially when you're uncertain about what legal grounds might apply to your situation. LawConnect provides personalised legal information through our AI legal assistant, which can help you understand how property settlement options work, what kind of binding financial agreement you may have, and the general steps involved in challenging an agreement.

Our AI assistant acts as an information tool to help you explore the range of options that may be available and to clarify general legal concepts. However, only a licensed lawyer can review your specific agreement, assess your circumstances, and provide legal advice on whether you have grounds to set aside the arrangement and what strategy might work best for you.

If you'd like to move forward with professional advice, we can connect you with a family lawyer who can assess your situation, explain your options, and guide you through the formal process. People sometimes note that becoming familiar with one's position is something that can form part of the general process, with timing connected to particular stages of proceedings.